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Internet providers pitch municipal broadband partnerships to Loveland City Council

Next week, council will discuss how to move forward

By Julia Rentsch

Reporter-Herald Staff Writer

Posted:
01/31/2018 07:41:46 PM MST

Longmont Power and Communications journeyman Lineman Brad Kaufman, right, and ground worker Jon Brunsheen, left, work to splice fiber optic cable near Grande Avenue and Main Street in Longmont. Longmont voters decided in 2011 they wanted municipal broadband and by 2014 the city system was serving customers. Loveland is now looking into municipal broadband options. (Matthew Jonas / Longmont Times-Call)

Demands for internet speed are rising fast among consumers, and the city of Loveland is exploring its options for how to cope.

Members of the council and city staff said repeatedly that they want a deal that will tend to the needs of Loveland internet customers who say they are being underserved by incumbent companies. Some councilors have also cited concerns about the city entering the business and competing with those same providers.

In 2015, over 82 percent of Loveland voters approved a ballot measure that allowed the city to provide a retail fiber-to-the-premise broadband utility. The ballot question stipulated that the city cannot raise taxes to fund it.

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Presentations

In addition to asking each company to discuss the "possible benefits, pitfalls, and concerns" of municipal broadband, the letter of invitation asked four specific questions: each company's Customer Satisfaction Index number; an example of a like-sized municipal fiber network that each company has installed and is operating; examples of public-private partnerships that each company is currently participating in where the company has reduced the municipalities' liability and risk; and, what percentage of a municipal fiber installation cost each company would be willing to fund.

Certain proprietary details could not be revealed in presentations to preserve each company's competitive edge.

The companies represent six of the 10 who responded to Loveland's request for proposals for gigabit speed public-private partnership broadband fiber networks. One gigabit is equal to 1,024 megabits of speed per second.

• Allo Communications

Brad Moline, president of fiber-to-the-premise provider Allo, highlighted the company's prior experience deploying municipal fiber networks in Nebraska in Lincoln, North Platte, Scottsbluff and Gering. The company is also starting a 40-year partnership with the city of Fort Morgan this year to provide gigabit speed internet over the city's existing fiber network backbone.

While the project's total construction cost would determine Allo's investment in the Loveland network, Moline said most Allo markets are self-funded. In Loveland, Allo would offer a 20-50 percent capital expenditure plus a lease.

Allo offers fiber internet, fiber TV and phone services for residences, and several additional business services.

Moline said Allo would be willing to move quickly to bring connectivity to everyone in the Loveland community, although properties in remote areas of the county would be connected on a case-by-case basis.

Moline said that before the city undertakes a municipal broadband initiative alone, it should keep in mind its experience in operations, the depth of the product set it can offer, and the scale that it can deploy its services to keep the prices low. Additionally, Moline warned the city to beware of the speed at which technology changes.

"That's the hardest thing for municipalities that I've seen, is acting or reacting to, for lack of a better term, that open checkbook — to modify as the technology modifies," Moline said.

• CenturyLink

Representatives from CenturyLink also emphasized the emergence of new technology, like wireless networks and 5G connectivity, as risk factors that necessitate flexibility in a city-sponsored broadband system.

Abel Chavez, state government affairs director for CenturyLink, said that in the event of a partnership with the city, CenturyLink is looking forward to improving its services and improving its technological offerings.

Nextlight installer Chris Downing feeds a fiber optic cable, a copper wire used to locate utility lines and a rope to pull additional lines through a vault in the ground near Heatherhill Circle and Renaissance Drive in Longmont. Longmont voters decided in 2011 they wanted municipal broadband and by 2014 the city system was serving customers. Loveland is now looking into municipal broadband options. (Matthew Jonas / Longmont Times-Call)

CenturyLink provides internet, TV and phone, and is exploring "over-the-top" service, which means allowing users to stream TV channels from the internet instead of subscribing to a traditional cable or satellite TV plan. They have recently introduced no-contract pricing.

A large part of CenturyLink's pitch to Loveland related to improving their customer service and filling in the city's CenturyLink coverage gaps. Currently, CenturyLink's customer service is rated "likely to recommend" by customers according to one metric, Chavez said.

"We stand ready to work with you," Chavez said to council.

• Comcast

Four of Comcast's Mountain West regional staff members spoke to council about Comcast's strengths.

Comcast's network reaches almost 38,000 housing units and the vast majority of 4,300 businesses in Loveland, and Comcast customers and its customers pay over $1 million to the city in fees and taxes, the presentation said. Comcast has about 75 employees in Loveland, and about 750 employees in all of Northern Colorado.

Comcast offers five different contract-products and a variety of bundled services.

The representatives said that in the event of a partnership with the city, providing service to every residence and business in Loveland might be cost prohibitive, but they would look into it.

"We look forward to spending more and more money connecting more and more businesses to our network," said John Lehmann, senior director for government and regulatory affairs. "If somebody's willing to pay for it, we'll get it there," he said.

Comcast representatives also emphasized that the company is spending about $1.5 billion in the next two to three years to improve their customer support. They assured the council that the majority of phone calls to their offices and help lines are answered from within the U.S.

Comcast does not offer symmetrical 1 Gbps service — meaning upload and download — for residences because the demand is not in the market, representatives said. However, Comcast does offer symmetrical 2 Gbps residential speeds for about $300 per month.

Lehmann said Comcast is making an investment in being 20 years ahead with its technology. Comcast representatives said Loveland would make a strong choice to partner with them, but if not, they would not leave town.

• Foresite Group

Representatives of the engineering and design firm Foresite Group emphasized that they offer a broadband option that poses low risk to the city.

Ben Lewis-Ramirez, a business development manager at Foresite, said the construction price estimates the city received — in the neighborhood of $100,000 for a public-private partnership — were "based on faulty assumptions."

Lewis-Ramirez proposed that his company could help engineer an open-access network for the city, and cover up to 100 percent of the cost to build it using their connections with private investors. He suggested that in a partnership with Foresite, the city would build the required broadband infrastructure, and then allow service providers to operate on that network.

Lewis-Ramirez said the council's key requirements for Loveland's network — affordability, high speed, ubiquity of access, reliability and excellence of customer service — cannot be met by a single provider.

One benefit to this type of setup is prices would go down, Lewis-Ramirez said.

"If the network is shared by all the providers in the market, the only way they can compete with one another are in the areas of customer service and price," Lewis-Ramirez said.

Additionally, in a city-owned network, the city would be able to collect a fee from internet providers for each customer they sign up on the network. Customers would also be able to switch between providers at will, Lewis-Ramirez said.

Councilors remarked that this suggestion was very different from those it had heard before.

"I just invite you to open your minds to another possibility," Lewis-Ramirez said.

• Mox Networks

Mox Networks approaches broadband as an open access network. But, the Culver City, California-based company is different in that Mox Networks is chiefly a custom fiber optic network developer and operator, rather than an engineer, a representative said.

The company has expertise in construction project management, network operations and network architecture and design, a spokesman said.

The company is also focused on managing relationships, he said, stating he did not want to enter a debate on whether Loveland's network would be called a city utility.

"They really wanted to drive some of the free-market principles ... really create an ecosystem with multiple different service types, multiple different service providers, and their ability to deliver service and minimize their end users by doing that," the Mox spokesman said.

He said he could not estimate the prices of a Mox-managed network, but said the city would have control of over costs it imposes on companies who use its infrastructure.

• Sherpa Fiber

A representative of Sherpa Fiber said the company's concept is to "simply help the city out by building a dark fiber backbone with a large abundance of fiber strands available."

Councilor John Fogle told the representative the city of Loveland already has a dark fiber network through Platte River Power Authority.

Next week, council will vote to allow city staff to move forward with the Loveland Broadband Task Force's recommendations, including that the city begin soliciting bids. City Council meetings occur at 500 E. Third St., Loveland.